Chapter 6
Game Theory Normal Form Games
Key words:
Game theory, strategy, finite game, zerosum game, payoff matrix, dominant
strategy, value of the game, fair game, stable solution, saddle point, pure strategy, mixed strategy,
expected payoff.
Suggested readings:
1. Gupta P.K. and Mohan M. (1987), Operations Research and Statistical Analysis, Sultan
Chand and Sons, Delhi.
2. Hillier F.S. and Lieberman G.J. (2005), Introduction to Operations Research, (8 ^{t}^{h} edition),
TataMcGraw Hill Publishing Company Limited.
3. Johnson R.D. and Bernard R.S. (1977), Quantitative Techniques for Business Decisions,
Prentice hall of India Private Limited
4. Raiffa H. and Schlaifer R. (1968), Applied Decision Theory, MIT Press.
5. Swarup K., Gupta P.K. and Mohan M. (2001), Operations Research, Sultan Chand and Sons,
Delhi.
6. Watson J., (2002), Strategy: An Introduction To Game Theory, W.W. Nortan & Company
7. Osborne M.J., (2001) An Introduction to Game Theory, Oxford University Press.
179
6.1
Introduction
The maximization of expected value criteria, which we have been discussing till now, is an efficient
criterion in the sense that depending upon all the available information, we have to choose a strategy
among all possible alternatives, so that we receive the maximum possible benefit. Here we assume that
the outcome of a decision is a random variable with some welldefined probability distribution.
In
other words we say that the outcome of decision is determined by some neutral factor (viz. nature).
Obviously, this neutral factor does not have any interest in the benefits or losses, which we are
receiving as a participant and hence is not an active participant in the process.
However, the situation may not always be so simple.
Sometimes, the outcome of a decision is not
controlled by a neutral factor but by a wellinformed and intelligent adversary who has an active
interest in the process. This is the situation of conflict (and competition).
The world is full of conflicting situations. In fact the resources in the world are limited and when one
party tries to increase its share in the available resources, it does so at the cost of any other party. This
is the situation of conflict.
Have a look at the world surrounding you and you will find conflicts
everywhere.
Labourmanagement
relationship,
political
and
military
conflicts,
competitions,
maneuvers, marketing and advertising tactics, these all are different faces of conflicts. In all these and
many more situations, one party tries to maximize its benefits at the cost of others.
While resolving these disputes is a timeconsuming and complex job, it is possible to develop optimal
strategies mathematically for such conflicts. Off course, when we are developing strategies, we make
some simplifying assumptions, (which we know may not always be true).
6.2 Game Theory
The techniques of developing optimal strategies for dealing with conflicting and competitive situations
(whenever these conflicts can be expressed in mathematical terms) have been termed as game theory.
We define some terms associated with the game theory
180
(i)
Strategy
A strategy is a comprehensive plan of action, formulated by a player (an interested
and active party in the game), who is well informed of all the alternatives available to him and to his
adversary (competing player).
A strategy can be good or bad.
possibilities.
The only requirement is that it should be complete and cover all the
(ii) Finite game
When the total number of possible strategies in a game is finite, it is called a
finite game. In the other situation, the game is an infinite game.
(iii) Zerosum game
Zerosum games are those games in which one player gains exactly the
same amount, which the other player(s) loose so that their net gains is equal to zero.
(iv) Non zerosum game
Zerosum games are those games in which gain of one player is not
necessarily equal to the loss of the other or vice versa.
(v) Payoff (game) matrix
A payoff matrix is a tabular representation of the payoffs of one
competitor, which are associated with his strategies in response to the strategies of the other player.
Consider two players A and B playing a zerosum game. Let A has m strategies numbered A _{1} , A _{2} … A _{m}
available to him and B has n strategies numbered B _{1} , B _{2} …
B _{n} , available to him.
Let the gain of A,
when he chooses i ^{t}^{h} strategy in response to the j ^{t}^{h} strategy chosen by B be given by g _{i}_{j} . Then the pay
offs of A can be represented as follows:
G
=
A
1
A
2
M
A
m
⎛
⎜
⎜
⎜
⎜
⎜
⎝
B
1
g
g
M
g
11
21
m
1
B
B
2
g
g
M
g
12
22
m
2
B
n
M
g
1 n
g
2 n
g
mn
⎞
⎟
⎟
⎟
⎟
⎟ ⎠
The matrix G is called the payoff matrix of player A. If g _{i}_{j} > 0, A has gained and if g _{i}_{j} < 0, then A has
lost an amount g _{i}_{j} .
Since the game is a zerosum game, so whatever is the gain of A is loss of B.
181
Assumptions of gaming problems
Game theory is meant for developing a rational criterion
for choosing a strategy among several possible strategies. For developing such criteria, we make some
assumptions:
(i) 
The number of players in the game is (in general) finite. 
(ii) 
The interests of the players clash and each player is choosing his strategy solely for his 
welfare. 

(iii) 
Each player is well aware of all the strategies available to him and to his opponents. 
(iv) 
All the players are making their moves simultaneously, without knowing the choices, 
which the other players have made. 

(v) 
The outcome of the game depends upon the moves made by different players; and 
(vi) 
All the players are rational players. 
6.3 Solving a zerosum game
In general, the games are zerosum games.
For the simplicity of presentation, we assume that the
games are two players’ games. We define some terms associated with the solution of the games.
(i) Dominant strategy
Consider the following game (G _{1} )
B
A
1
A
2
B
1
7
5
B
2
4
2
B
3
6
4
This game matrix suggests that the two players A and B are playing a game with A having two (viz. A _{1}
and A _{2} ) and B having three (viz. B _{1} , B _{2} and B _{3} ) strategies.
In this case A would always opt for the
strategy A _{1}_{,} as it would yield him better payoffs than the payoffs yielded by the strategy A _{2} . We say
that A _{1} is a dominant strategy.
A strategy is said to be a dominant strategy if it always yields better (or at least equal) payoffs than the
other strategies irrespective of the strategies opted by the other player(s), i.e., superior strategies
(resulting in higher payoffs) dominate the inferior ones (resulting in lower payoffs).
situations, inferior strategies can always be strike off.
182
In such
Consider the following example
Example 1:
Two firms, ABC Ltd. and XYZ Corp. are competitors in the market of electronic
goods.
In order to increase its market share, each of the firm can opt any of the following three
strategies: high advertising, moderate advertising or low advertising.
Corresponding to different
possible conditions, the payoffs in terms of percent market share are given below:
High(1)
XYZ Corp.
Moderate(2)
Low(3)
^{A}^{B}^{C} ^{L}^{t}^{d}^{.}
High(1) 
2 
3 
5 
Moderate(2) 
2 
0 
6 
Low(3) 
0 
2 
1 
The managements of the two firms are interested in determining the optimal strategies.
Sol:
For XYZ corp., as such there is no dominant strategy.
But for ABC Ltd, strategy 1 is
dominant over strategy 3. We eliminate the dominated strategy and the reduced payoff matrix is given
by
High(1)
XYZ Corp.
Moderate(2)
Low(3)
^{A}^{B}^{C} ^{L}^{t}^{d}^{.}
High(1) 
2 
3 
5 
Moderate(2) 
2 
0 
6 
In this reduced matrix, XYZ corp. would try to minimize its losses so it would eliminate those
strategies that are paying a higher payoff to ABC Ltd. and hence strategies 1 and 2 for XYZ corp.
becomes the dominant over strategy 3 and hence strategy 3 can be eliminated.
we have
183
After this elimination
ABC Ltd.
High(1)
XYZ Corp.
Moderate(2)
High(1) 
2 
3 
Moderate(2) 
2 
0 
At this point, ABC Ltd. will again try to maximize its gains and for that it would eliminate strategy 2 so
we have
ABC Ltd.
High(1)
XYZ Corp.
Moderate(2)
High(1)
2
3
Finally, XYZ Corp. would settle at strategy 1, which is minimizing the payoff to ABC Ltd. Hence the
optimal strategy for both the players would be to go for high advertising.
With the selection of the optimal strategies, the market share of ABC Ltd would increase by 2%. This
is the value of the game.
We define the following terms
Value of the game
The payoff received by the player (whose payoff matrix is given) when
both the players play optimally, is called the value of the game.
Fair game 
A game that has a value 0, i.e., neither player is neither a loser nor a winner, is called a 
fair game. 
The above game is not a fair game.
In the game G _{1} , A will always choose the strategy A _{1} .
But what would be the strategy chosen by B?
Since whatever is the gain of A, it is the loss of B so naturally B would try to minimize his loss (or gain
of A). Then B’s obvious choice will be the strategy B _{2} . The value of the game in this case is 4.
(ii) The maximin and minimax principle
Consider the following game:
184
B
A
1
A
2
A
3
B
1
1
2
0
B
2
3
1
2
B
3
6
3
1
If A chooses A _{1} , then B will choose B _{1} so that the gain of A (or loss of B) is minimized (to 1).
For
strategy A _{2} chosen by A, B will select the strategy B _{3} . Similarly for strategy A _{3} of A, B will choose the
strategy B _{1} . Thus the minimum payoffs assured to A are
Table 6.1
Strategy 
Minimum payoff 

A 
1 
1 
A 
2 
3 
A 
3 
0 
Among these minimum assured payoffs A would try to maximize his payoff. Thus he would choose
the strategy A _{1} that is the maximin (maximum among minimum) strategy.
Similarly, the player B is playing to minimize his losses.
corresponding to different strategies selected by him:
We have the following loss table
Table 6.2
Strategy 
Minimum payoff 

B 
1 
2 
B 
2 
3 
B 
3 
6 
Then the strategy B _{1} , which corresponds to the minimum loss among the maximum possible losses, is
the minimax strategy.
Thus minimaxmaximin principle is that rule on the basis of which one player tries to minimize the
worst possible losses and the other player tries to maximize the minimum assured gains.
185
Example 2:
For the firms ABC Ltd. and XYZ Corp., let the payoff matrix be given by
High(1)
XYZ Corp.
Moderate(2)
Low(3)
Row minimums
^{A}^{B}^{C} ^{L}^{t}^{d}^{.}
High(1)
Moderate(2)
Low(3)
Column maximums
4 
1 
7 
4 

2 
0 
3 
0 
← 
Maximin value 
3 
2 
1 
2 

3 
0 
7 

↑ 
Mini max value
On solving this game using dominance principle, we have
Step 1: 
XYZ Corp. 

High(1) 
Moderate(2) 

High(1) 
4 
1 

ABC Ltd. 
Moderate(2) 
2 
0 

Low(3) 
3 
2 

Step 2: 

XYZ Corp. 

High(1) 
Moderate(2) 

ABC Ltd. 
Moderate(2) 
2 
0 

Low(3) 
3 
2 

Step 3: 

XYZ Corp. 

Moderate(2) 

ABC Ltd. 
0
2
Moderate(2) Low(3) 

186
Step 4:
ABC Ltd.
XYZ Corp.
Thus the value of this game is 0. In this game maximin gain of ABC Ltd. is same as the minimax loss
of XYZ Corp. Such a game is said to possess a saddle point.
Saddle point
A saddle point of a game (if it exists) is that point in the payoff matrix (of player A)
where maximin gain of A is equal to the minimax loss of player B. In such a case, the saddle point is
the value of the game.
To find a saddle point
(i) 
Find the minimum values in the rows; 
(ii) 
Mark the maximum of these minimums. This is the maximin value (or gain) for player A; 
(iii) 
Find the maximum values in columns; 
(iv) 
Mark the minimum of these maximums. This is the minimax value (or loss) for player B; 
(v) 
If the maximin gain of A = the minimax loss of B, the point in the payoff matrix is the 
saddle point.
Stable (equilibrium) solution
If a saddle point exists in a game, the corresponding pair of
strategies is a stable (equilibrium) solution.
The solution is stable due to the fact that in presence of a saddle point neither player is in a position to
take advantage of the information about the opponent’s choice. In order to optimize his payoff, each of
the players has to stick to that strategy, which would lead him to the saddle point. Hence the solution is
a stable solution.
(iii) Use of mixed strategies
Consider the following game
187
Player 
B 

1 
2 
3 
Row minimums 

1 
0 
2 
2 
2 ← Maximin value 

Player 
A 
2 
5 
4 
3 
3 
3 
2 
3 
4 
4 

Column maximums 
5 
4 
2 

↑ 
Minimax value
In this game, since minimax value is not equal to maximin value so the game does not have a saddle
point. Since both the players are rational players so they are choosing their strategies in such a manner
as to maximize their benefits.
Starting with A, the player is assured of minimum gain of two units.
And subsequently he will choose strategy 3. Anticipating this situation, player B will try to minimize
the gains of player A and hence he will choose that strategy 3.
Now player A, being aware of the
intentions of B, will choose strategy 2 to maximize his payoff. In this position, B will have to go for
strategy 3 and the whole process will repeat itself. Thus this game does not have a stable solution.
In such games the fact persists that on having information about the opponent’s moves; each player can
improve his position. Then, in such situations, in order to arrive at a solution, it is necessary that none
of the players should have any advance knowledge about the opponent’s moves. So, in place of having
some criterion about choosing a single strategy to be used definitely, a probability distribution is used
to choose among various possible (and acceptable) strategies. By doing so, none of the players will, in
advance, be able to know about the strategies to be used by his opponent or to be used by himself.
We define the following terms:
Pure strategy
When a player knows with certainty the strategy that he is going to use, the strategy
is called a pure strategy. In fact, a pure strategy is a strategy actually used.
Mixed strategy
When a player does not know about the strategies to be used with certainty, but uses
a probability distribution to determine it, then that probability distribution is called a mixed strategy.
188
Consider a game, being played by two players A and B that have no saddle point. Let player A has m
strategies available to him and the player B has n strategies available to him. Define
p
i
q
j
=
=
P
P
(player
(player
A
B
uses
uses
i
j
th
th
strategy) ,
strategy) ,
i
j
=
=
1 , 2
1 , 2
m
n
.
;
For player A, the pure strategies are _{(}_{1}_{,} 2
m) and the mixed strategies are _{(}
p
1
,
p
2
p
m )
Expected payoff: A measure of performance of mixed strategies
Let g _{i}_{j} be the payoff to player
A when the player B uses the strategy j and he uses the strategy i, i = 1,2… m and j = 1,2…n. Then the
expected payoff of the player A is defined as
(
E G
)
m
n
= ∑∑
i
=
1
j
=
1
g
ij
p q
i
j
⎛ 1 1 , 0 _{⎟} ⎞ and that used by the player B are 

Suppose that the mixed strategies used by the player A are ⎛ ⎜ ⎝ 0 , 1 2 , 1 2 ⎞ ⎟ ⎠ . Then the expected payoff to player A is, ⎝ ⎜ 2 
, 2 ⎠ 

Player 2 ⎛ B 1 ⎞ 
3 
⎛ 
1 
⎞ 

1(0) 
⎝ ⎜ 2 ⎠ ⎟ 
⎝ ⎜ 
2 
⎠ ⎟ 

2 ⎟ 
0 
2 
2 

Player 
A 
5 
4 
3 

2 
3 
4 

( E G 
) 
= 
⎛ 1 ⎞⎛ 1 ⎞ ⎜ ⎝ 2 ⎠⎝ 2 ⎠ ⎟⎜ ⎟ 
( 224 − + + − 3 ) 
= 
1 4 
The expected payoff can be used to choose that strategy which will maximize the minimum
guaranteed payoff (the maximin criterion).
Let the maximin payoff be denoted by _{ν} .
189
The optimal strategy for player B will minimize the maximum expected loss. Let this value be denoted
by ν . In the games, which have no saddle point, if only pure strategies are used, then
ν ≤ν
Thus the players keep on flipping their strategies in a hope to improve their positions.
For a game to be a stable game, it is necessary that
ν =ν _{.}
We state the following theorem
Theorem 6.1
If the mixed strategies are allowed, then the optimal pair of mixed strategies
(according to the maximin criterion) will correspond to a stable solution and in that case ν
= ν = ν.
in this case, ν will be the value of the game.
6.4 Calculus approach to solve a 2X2 game
In this method, the expected value of the game for a player is maximized and the probability (mixed
strategy) corresponding to which this maximum value exists, is obtained.
Consider the following game
Player
A
B
1
Player
B
B
2
A
1
A
2
a
a
11
21
a
12
a
22
To find the optimal mixed strategy for this game, we have to optimize expected gain to any one player.
Suppose we want to maximize the expected gain to player A. We assign probabilities x and 1x to A of
choosing strategy A _{1} and A _{2} respectively. Similarly probabilities y and 1y are assigned to player B for
choosing strategies B _{1} and B _{2} respectively. Then expected gain to player A is given by
E(A)
=
xya
11
+ x(1− y)a
190
12
+ (1− x)ya
21
+ (1− x)(1− y)a
22
To determine optimal values of x and y, we differentiate this function partially with respect to x and y at
0,0, and we get
The two equations yield
∂ E A ( ) 

∂ x 
= 

and 
∂ E A ( ) 
= 

∂ y 

( y a 11 
+ 
a
ya
xa
11
11
22
−
+
+
(1
(1
−
−
y ) a
12
x ) a
21
a
12
−
a
21
)
−
−
=
ya
21
xa
12
a
22
−
−
−
(1
(1
−
−
a
12
y ) a
22
x ) a
22
⇒
y
x ( a
⇒
x
a 22 
− a 12 

a 11 + a 22 
− a 12 − a 21 

a 22 
− 
a 12 
− 
a 21 ) = 
a 

a 22 
− 
a 21 

− 
a 11 + a 22 ) y a 12 + 
− (1 
a − 12 − a ) x ya 21 21 
+ 
=
11
=
+
and
Substituting these values of x and y in E (A), we have
E
(
A
)
=
xya
11
+
x
(1
=
a
11
a
22
−
a
12
a
21
22
(1
− a
21
−
x
)(1
−
y a
)
22
=
=
0
0
Thus expected gain of player A for these values of x and y is maximum.
We illustrate the results with the help of the following examples.
191
Example 3:
Let the payoff matrix of two players A and B is given as follows:
Player B
y 
1 
y 

Player A 
x 
1 
7 

1 
x 
5 
2 
Player A selects his strategies with probabilities x and 1x respectively and the player B chooses his
strategies with probabilities y and 1y respectively. Find the solution to the game.
Sol:
Expected gain of player A is
E( A) = xy + 7x(1− y) + 6(1− x) y + 2(1− x)(1− y)
This expected gain is to be maximized for player A. for that, we differentiate the expression partially
with respect to x and y at zero. We have
And
The value of the game is
∂ E ( A 
) 
6 

∂ x 
= 
y 
+ 
7(1 
− y ) 
− 
y 
− 

⇒ − 
10 
y 
+ 
5 
= 
0 

⇒ 
= 
1 
− 
= 
1 

y 
y 
2 

∂ E ( A 
) 
7 
6(1 
) 

= 
x 
− 
x 
+ 
− 
x 
− 

∂ y 

⇒ − 
10 
x 
+ 
4 
= 
0 

⇒ 
x 
= 
2 
and 
1 
− x 
= 
3 

5 
5 

E 
( A 
) 
= 
xy + 
7 
x 
(1 
) 

= 
4.0 
2(1
2(1
−
−
y
)
x
)
− y + − x y +
6(1
)
=
=
2(1
0
0
− x − y
)(1
)
Example 4:
In a cointossing game, Player A wins a unit amount when there is a sequence of HH
and wins nothing if there is a sequence of TT. However, a sequence of HT or TH results in a loss of
half unit to player A. Find the best strategies for two players and the value of the game.
192
Sol:
The payoff matrix of the player A is as given below:
Player A
A
A
2
Player B
BB
1
2
1
1 0.5
0.5
0
Since the game does not possess any saddle point, we use mixed strategies for two players. Let Player
A selects his strategies with probabilities x and 1 x respectively and the player B chooses his strategies
w ith probabilities y and 1y respectively. Then
a 
− 
a 
0.5 

x 21 22 

= 
= 
= 

a 
+ a 
− 
a − 
a 
1 0.5 + + 
0.5 

and = 
11 a 22 22 − a 12 
21 
= 
0.5 
= 

y 12 a 11 + a 22 − a 12 − 
a 21 
1 0.5 + + 
0.5 

Then 1 x 
= 
1 y 
= 0.75 

T he expected value of the game is 

= 
− (0.5)(0.5) 
= − 0.25 
= 
− 0.125 

υ 

1 + 0.5 
+ 0.5 
2 

6.5 Graphical solu on procedure ti 

Consider again the above payoff matrix: 

Player B 

1 
2 
3 

1 
0 
2 
2 

Player 
A 
2 
5 
4 
3 

3 
2 
3 
4 
0.25
0.25
Foe player A, strategy 2
is dominant over st
strategies for player A are _{(} p , p
1
2
); p
2
=
1
− p
1
rategy 3, so after eliminating str
and the reduced payoff matrix is
ategy 3, the mixed
193
Player
A
1(
p
1
)
2(1
p
1
)
Player B
1( 
q 
1 
) 
2 
( 
q 
2 
) 
3 
( 
q 
3 
) 
0 
 2 
2 

5 
4 
 3 
If player B chooses strategy 1, then the expected payoff of player B is
Similarly for strategy 2, the expected payoff is −
2
p
1
− (
1
− p )
1
3
= −
3
+
5
^{p} 1
.
214
p
1
+
(
− p )
1
=
4
−
6
0
p
1
+
(
1
− p )
1
5
=
5
−
5
p .
1
p
1 and that for strategy 3 is
In graphical method of solving a game problem, we plot these expected payoffs on a graph.
Player B is playing to minimize the expected payoff of player A, so he will choose that strategy, which
corresponds to the lines lying in the bottom part of the graph, i.e., −
3
+
5
p
1
or
4
−
6
p
1
.
Now, the player A is playing to maximize this expected payoff so he chooses that strategy which will
maximize the payoff yielded from these lines, i.e. the intersection of these two lines which is given by
− +
3
⇒
5
p
p
1
1
=
=
7
11
4
−
6
and
p
1
p
2
194
= 4
Now, we proceed to find the optimal strategies for player B:
The expected payoff of player A is
q (
1
5
−
5
p ) + q (
1
2
4
−
6
3
p ) + q (− +
1
3
5
p )
1
and by the minimax
theorem as ν
= ν
= ν , so if the optimal strategies for the player B are (
satisfy the maximum expected payoff to A, I.e.,
q
'
1
(
5
−
5
p
1
)
+
q
'
2
(
4
−
6
p
1
)
+
q
0 ≤
'
3
(
p
− 3 +
1
≤
5
1
p
1
)
q' ,q' ,q' )
1
2
3
, these must
≤ν =ν =
2
11
195
Put p
Since
=
7
1 11
^{s}^{o}
20
2
>
11
11
So we have
and q '
1
20 
' 
+ 
2 
' 
+ 
2 
' 
= 
2 

11 
q 
1 
11 
q 
2 
11 
q 
3 
11 

Also 
q 
' 
1 
+ 
q 
' 2 
+ 
q 
' 
3 
= 
1 
≥
q
0
'
2
, so the only possible value for
^{⎧}
⎪
⎪
⎨
⎪
⎪
⎩
≤
=
q ' 
1 
is 
q' 

2 
0 
≤ 

11 
; 
p 
1 

2 
7 

= 

11 
; 
p 1 
11 
(
4
−
6
p
1
)
+
q
'
3
(
− 3 +
5
p
1
)
1
≤
=
1
0 ,
As the left hand side is a linear expression so the only possible solution to this relation is
Let p _{1} = 0 and 1,
q '
2
⇒
(
4
and
−
6
p
1
)
+ q
'
3
(
4
q
'
−
2
2
−
q
'
2
3
q
'
+
2
3
q
− + p
3
5
=
'
3
2
11
1
Solving these two equations, we have
q
'
2
=
5
q
'
=
6
11
3
11
and
Thus the optimal strategies for player B are
⎛
⎝ ⎜
0 ,
5
6
11
,
11
⎞
⎠ ⎟
.
) =
2
11
6.6 Linear programming approach
The graphical method, although a convenient method of solving a game problem, which does not have
a saddle point, suffers from a major limitation. This method can be used only when one of the players
196
has only two (undominated) pure strategies.
But, this may be too simplified a situation.
In large
games, where each of the players may have several strategies to choose from, this method cannot be
employed conveniently.
In such problems, linear programming approach is adopted.
The expected payoff to player A is
For a strategy (
p
1
,
p
2
,
,
p
m
) to be optimal,
E ( G
)
m
n
= ∑∑
i
=
1
j
=
1
E(G) =ν =
g
ij
p q
i
ν.
j
Since this relationship holds for each of the opponent’s strategy (
q
1
,
Also,
for
j
=
1 2
,
m
n
n
∑∑
i
=
1
j
=
1
, and putting
m
∑
i = 1
q
j
=
g
ij
p
i
1
≥
&
ν
g
ij
p q
i
j
=
≥
n
m
∑ ∑
q
j
j
=
1
i
=
1
n
∑
=
j
1
q
ν
j
=
g
ij
p
ν
i
q
k
as
q
2
,
=
n
∑
=
j
1
Then the problem can be restated as follows
maximise 
p m + 1 
( 

subject to 

g 
11 p 
1 
g 21 p 2 
+ 

g 
12 p 
1 
g 22 p 2 
+ 

M 

g 
1 
n p 
1 
+ 2 g 
n p 2 
+ 

p 
1 
+ 
p 
2 + 
+ 
p 
m 

p 
i 
≥ 
0 
∀ 
i = 
+
+
197
=
ν
)
+ g
+ g
m
m
1
2
p
m
p
m
+ g
mn
p
= 1
1 2
,
m .
m



p
m +
1
p
m +
1
p
m
+ 1
,
q
n
0 ∀
) so we have,
k
≠
j
q
j
=
1
≥ 0
≥ 0
≥ 0
For player B, the equivalent problem is
minimise
subject to
M
q
m
g
g
11
21
+ 1
q
1
q
1
(
+
+
=
ν
)
g
g
12
22
q
2
q
2
g
q
q
m
1
i
1
q
1
+
q
≥
+
g
2
+
0
m
2
q
+
∀
+
+
2
+
q
i
n
=
Thus the two problems are dual problems.
+
+
g
1
n
q
n
g
2
n
q
m

q
n +
1

q
n +
1
+
=
1 2
,
g
mn
1
n
q
m

q
n +
1
≤
≤
≤
0
0
0
In order to ensure that p _{m}_{+}_{1} and q _{n}_{+}_{1} are nonnegative, a sufficiently large quantity can be added to it. As
this quantity is added to every entry, the optimal strategy will remain the same.
To demonstrate this approach, we again consider the earlier problem, which using linear programming
approach can be restated as follows:
subject to
maximise
p
3
(
=
ν
)
5
p
2
−
p
3
− 2
p
1 +
4
p
2
−
≥
p
2
p
p
1
1
−
3
+ p
2
p
2
 p
3
= 1
3
0
≥ 0
≥
0
p _{i}
≥ 0
i = 1 2
,
.
The following algorithm gives the optimal solution to the problem
198
Simplex method Twophase procedure
Phase 1 Iteration 1
Table 6. 3
Basic 
p 
1 
p 
2 
p 
3 
Sp _{4} 
Sp _{5} 
Sp _{6} 
Rp _{7} 
Rp _{8} 
Rp _{9} 
Rp 10 
Solut 

variables 
ion 

z 
(min) 
1.00 
7.00 
3.00 
1.00 
1.00 
1.00 
0.00 
0.00 
0.00 
0.00 
1.00 

Rp _{7} 
0.00 
5.00 
1.00 
1.00 
0.00 
0.00 
1.00 
0.00 
0.00 
0.00 
0.00 

Rp _{8} 
2.00 
4.00 
1.00 
0.00 
1.00 
0.00 
0.00 
1.00 
0.00 
0.00 
0.00 

Rp _{9} 
2.00 
3.00 
1.00 
0.00 
0.00 
1.00 
0.00 
0.00 
1.00 
0.00 
0.00 

Rp 10 
1.00 
1.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
1.00 
1.00 

Lower 
0.00 
0.00 
 
∞ 

bound 

Upper 
∞ 
∞ 
∞ 

bound 

Unrestric 
n 
n 
y 

ted 

(y/n)? 

Phase 1 Iteration II 
Table 6. 4 

Basic 
p 
1 
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